GOP leader opposes new tax on iron mine

Assessment on amount extracted had been sought

Feb. 13, 2013

Written by

Todd Richmond

Associated Press

MADISON — The state Senate’s top Republican said Wednesday he opposes including any so-called tonnage tax in a bill that would overhaul Wisconsin’s mining regulations.

Senate Majority Leader Scott Fitzgerald said during a brief address at a Madison business convention that a faction of his caucus has been mulling tweaking the bill to add the tax, which would require mining companies to pay according to how much iron they extract. He said such a tax would signal that legislators don’t want mining in the state and Republican Gov. Scott Walker almost certainly would veto any bill that includes it.

“It flies in the face of everything we’ve talked about for two years,” Fitzgerald told reporters during a question-and-answer period after the speech. “This state is a state that welcomes mining. I don’t understand why you’d want to do that.”

Later Wednesday, Walker stopped short of explicitly saying he would kill the bill if it included a tonnage tax during a news conference to announce domestic violence funding in his upcoming state budget. But the governor did say he doesn’t support the idea.

“I’m not issuing vetoes before I get bills in front of my desk,” Walker said. “But I think you’re right. That’s not something I’m in favor of as a new tax in that regard.”

Republicans have been working for more than a year to help Gogebic Taconite open a massive iron mine in the Penokee Hills just south of Lake Superior. Company officials have promised the mine would create hundreds of jobs in the area and thousands more for heavy equipment manufacturers around the state, but they want Republicans to clear the regulatory path before they move forward.

Conservationists and Democrats, meanwhile, have railed against the company’s plans, insisting the project would devastate the area’s pristine environment.

Republicans introduced a bill in January that makes sweeping changes to the state’s mining regulations. The proposal includes what’s known as a net proceeds tax on iron mining companies. Essentially, the companies would have to pay a tax based on a percentage of their annual revenue. The money would be divided between local governments around the mine site and the state.

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Fitzgerald said during his speech that some members of his caucus are worried the mining industry is too volatile and a company might not make enough money to generate much tax revenue. They want to impose the tonnage tax to ensure locals and the state get something, he said.

But Walker won’t support any new taxes, Fitzgerald, R-Juneau, said, adding the bill still would ensure locals get money through mining company fees as well as the net proceeds tax. He said he didn’t consider the proceeds tax a new tax because that’s how businesses are currently taxed.

He didn’t say who in his caucus supported the tonnage tax during the speech and shrugged off the question during his conversation with reporters afterward.

The bill is currently before the Legislature’s budget committee awaiting a vote that would send it on to the full Assembly and Senate. Fitzgerald said he wasn’t sure when the panel would take up the measure but hinted it would be soon, saying he hopes the full Senate will vote during the last week of February.